During periods of global uncertainty, holding onto cash may feel a safe bet, but doing so can affect both your portfolio performance and your purchasing power. In the latest episode of our Wealth Insights podcast, we look at the role cash plays in a portfolio, and how it can be successfully deployed.
Listen to the podcast
To hear the full conversation, please use the player below or follow the links to Apple Podcasts or Spotify.
Due to the current potent mix of rising inflation, market volatility, and increased geopolitical tension, many investors are holding larger amounts of cash as a safety net, rather than tactfully deploying it into other asset classes. But doing so can weaken the successful preservation of wealth over time.
The balancing act of holding cash
Many people might imagine that cash does not lose value on a daily basis because it doesn’t have the mark to market – the method of measuring the fair value of an asset that can fluctuate over time. However, given the current inflationary environment, your purchasing power is being eroded and your real performance is negative. This situation can be eased by deploying cash gradually following a disciplined, long-term strategy that diversifies risk and encompasses lasting structural trends.
In the latest episode of Wealth Insights, Julius Baer’s Head of Investment Advisory, Diego Wuergler, discusses the role of cash in an investment portfolio, how it can be better used than just sitting in a bank account, and what might be behind people’s reticence to invest at this time.
To listen to the full episode please use the player above, or follow the links to Apple Podcasts or Spotify.